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Financial institutions make strides in overall e-banking services 6/1 NJBusiness Since the 1990s, banks have been expanding & improving their online services for both retail & business customers. One driver of this trend is the possible savings for banks when increased services are provided via technology rather than with more branches & personnel. An important driver is market demand from consumers who have become attuned to a wide range of other computer-related services in their daily lives. M-banking is a natural extension of this electronic approach. Any banker one speaks with today is likely to say that his or her own institution is monitoring developments in this field carefully. Not every bank has yet made the jump into mobile. What’s still keeping many institutions from making an immediate commitment here? Factors such as cost, security issues & still not perfectly resolved technology choices are some of the reasons mentioned. However, even institutions not yet offering mobile have usually been expanding their online services in a variety of ways to meet the needs of a 24 / 7 banking population that often doesn’t have the time or inclination to visit a branch in person. The banks that have made the leap into mobile wireless have generally seen a positive customer response. BofA reported that 6 months after launching its m-banking program last year, it had more than 500,000 customers using the service. & by the year’s end, it had 616,000 m-banking customers, according to Tara Burke, BofA. ‘M-banking is a natural extension of our online banking strategy, providing customers with anytime / anywhere access to their financial information,’ she notes. ‘Customers can access the core capabilities that are available via online banking - checking balances, paying bills, transferring money, viewing transactions, locating banking centers & ATMs, & receiving e-alerts.’ One major concern about m-banking for other banks & many potential customers involves security, but Burke says that BofA has taken a number of important steps to address such concerns. ‘We are leveraging the same award-winning security features that we provide through our online service, including SiteKey & our zero liability guarantee. We’ve developed a unique end-to-end security feature that ensures information remains encrypted, & because our service is Web-based, information is not stored on the handset.’ Capital One is another early leader in providing m-banking services. These were first offered last year & quickly received a favorable reception. ‘Customers adopted the product easily, with few questions,’ says Pam Hymel, Capital One. The product became available in the bank’s northern markets after the conversion of North Fork Bank’s computer systems to Capital One’s systems in March. ‘The customers in the north, including NJ, quickly embraced the product; our m-banking customer base doubled the weekend of the computer-system conversion.’ Hymel emphasizes the importance of keeping the m-banking process as simple as possible in order to promote rapid customer acceptance. ‘We have worked with a leading m-banking vendor to deliver a convenient banking experience for customers. Together, we developed fonts, colors & other graphics to ensure that the flow & usability of the mobile applications worked well on a hand-held device.’ Security issues have not proven an impediment for Capital One’s mobile initiatives. ‘We only support devices that have full encryption technology. This technology encrypts all transmissions made by the device. It is what takes the customer to our online banking application.’ & with the security issues addressed, Capital One is now ‘focused on expanding the functionality of m-banking so that it offers more of the functionality available in online banking.’ The bank is ‘looking at expanding its online small-business offerings’ in this medium. When it comes to why every bank has not yet begun offering mobile services to its customers, a number of explanations are given by banking executives. Almost all are answered with the caveat that mobile will one day be coming to their institution, just not quite yet. lack Novielli, Provident Bank in Jersey City, says that for now, ‘we want to see how it evolves, validate security issues, get a firmer grasp on the industry before we dive in & see the vulnerable points of m-banking.’ Ken Richard, Roma Bank in Robbinsville, says that ‘we’re staying on top of it & seeing how the market develops ... There’s no demand from our customer base at present so there’s no immediate need to incur the expense.’ Additional reasons for this wait-&-see approach are evidenced by Tim Lenhoff, Columbia Bank, Fair Lawn. ‘There are still a lot of vendors out there, 12 or 15, wanting to work with banks, & the market is not yet settled. In some ways it’s a little like the old Beta versus VHS choice for VCRs.’ Banks that might not be jumping on the m-banking bandwagon now are nonetheless improving & expanding their present online service offerings. Novielli notes that along with a variety of online cash management, deposit, fund transfer & other services now offered Provident’s business customers (services that are incorporated in several online modules), a bill paying feature is being tested & should be available some time in 2009. ‘This will allow businesses to invoice & capture payments, all electronically.’ Keith Pericoloso, Roma Bank, points to a new Internet banking service, now in a testing mode by his own bank, that is scheduled to be in place by mid-summer. It will feature the same sorts of products - CDs, saving accounts, etc. - offered by INC. ‘With Internet banking we can offer slightly better rates & be competitive with other online banks. It will give our bank customers their preferred access. Some like online, some like to come to the bank.’ Pericoloso notes that while young customers today almost all expect at least some online services at their bank, many older customers do as well, & even those not attuned to online banking at first can be shown its advantages with a bit of innovation & imagination. At Roma ‘we ran a very successful program to increase online banking awareness. We set up computers in our branches, in special kiosks, where people could come to learn about our online services & how to access them.’ Paying bills online is a popular service at many banks. At Columbia Bank ‘it was adopted slowly at first, but since then, there’s been a steady growth in customers who want this option. Now, most of our new accounts request it.’ & complimenting this well-established service, ‘we’ll soon be offering an online bill presentment option as well.’ A number of factors will determine how rapidly mobile services are offered by banks. Customer demand, technological advances, the costs to banks of adding this service, & even the overall state of the economy which can influence acceptance of any new service, will all play a part. Mobile wireless is just one way in which banks are expanding & improving their electronic customer offerings. As people’s lives continue to take on a greater 24/ 7, 365-days-a-year edge, banks will accommodate the financial needs of this more crowded lifestyle. Electronic-based offerings will continue to be seen as a more efficient & economical way to supplement banking’s traditional brick-&-mortar approach to providing customer service.